Case Study – Fixtures and Fittings

The client is a real estate operation and was in the process of purchasing a rival business and opening a new branch. In real estate presentation is a key factor is securing new properties and the client decided to upgrade the branch office with new fixtures and fittings. This type of financing is very difficult as most financiers view fixtures and fittings as high risk.

The client was very strong financially and has the largest property management portfolio so ability to service was evident however the finance required to complete the upgrade was in the vicinity of $200k. The client had borrowings with a number of financiers and we approached each of these financiers with our financing application without success.

One Major lender was our last option andeven though the client was new to them they were prepared to look at financing these goods. The lender took the view that the client was well established in the real estate industry, had an excellent reputation and was financially strong. Their financing structure was based on the client paying a 10% deposit (The lender to fund the balance of 90%) over a 3 year term at bank commercial rates. There was no further security required aside from Directors’ guarantees. The client was very pleased with the outcome and the new branch is now a showpiece in the industry. The client is now looking at further business acquisitions and the lender will be the chosen financier to finance both the business acquisition and branch upgrade.

This case study shows that whilst most financiers would appear to have a negative attitude to this type of financing for the right clients there is always a solution and it just requires flexibility from the client and the financier to achieve a positive result.

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